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Brookstone

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Brookstone

Brookstone
Type Privately held company
Industry Retail
Founded Peterborough, New Hampshire 1965[1]
Headquarters Merrimack, New Hampshire
Number of locations 300 (April 2011)[2]
Owners Sailing Capital
Sanpower Corp.
Website http://www.brookstone.com/
A Brookstone store in Kittery, Maine

Brookstone is a chain of retail stores in the United States. Its first location opened in 1973 in Peterborough, New Hampshire.[3] The company's headquarters are currently located in Merrimack, New Hampshire.[3][4]

Brookstone sells a wide assortment of products including remote control helicopters, alarm clocks, massage chairs, speakers, iPads accessories, blankets, pillows, and many other lifestyle items. Most of the products sold at Brookstone stores are designed by the company and sold under its own brand.[3][5] Brookstone stores are generally found in shopping malls and high-traffic city areas, such as Midtown Manhattan.

The company is also distinctive in that it allows customers to play with any product in the store before making a purchase.[3]

On April 3, 2014, the company filed for bankruptcy under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware; in its first-day motions on 4 April, the company sought permission to be acquired by the parent of Spencer Gifts.[6] The company's stores are to remain open and running as usual during the bankruptcy process.

In June 2014, Brookstone was purchased by the Chinese investment firm Sailing Capital and Chinese conglomerate Sanpower for more than $173 million. The Company successfully emerged from Bankruptcy in July 2014 with a restructured balance sheet, an improved capital structure, and a new strategic partner who is committed to growth of the Brookstone brand both in the U.S. and internationally.

History

Pierre de Beaumont and his wife Marry began Brookstone in 1965, for $500.[7] After learning accounting by correspondence, they began mailing catalogs to thousands of hobbyists.[7] It was based in their Berkshires farmhouse, and they named the company after their farm.

Pierre de Beaumont was known as a tinkerer,[7] and Brookstone's start and initial product base was driven around the purpose of making hard-to-find and useful items/tools.[4][7][8] Brookstone started out as a catalog company,[3] with local and long-distance catalog circulations that initially were introduced from a classified ad in a Popular Mechanics magazine in 1965.[3][8] The demand for the unique products that Brookstone offered developed into a strong consumer, demand-based system that led to a need for specific Brookstone retail stores.[4]

Brookstone opened its first store in 1972 in New Hampshire. Due to the growing success of this store, many more followed during the next decade. One small issue developed from their store outlets – this issue was that the customer-base for Brookstone stores were almost exclusively limited to those who receive their distributed catalogs. Brookstone fixed this issue in the 1980s by introducing products in their store not available in their catalogs that still had a focus on their original idea of offering unique tools and household goods. The new items introduced in their retail stores brought in items geared towards travel, leisure, technology, audio, and games, and even developed a hands-on experience for almost all of their products.[3][4][8] Due to the introduction of these new products, more customers developed an interest and sales gradually increased through the 1980s.[4]

In 1987, sales were posted at $93 million, which Brookstone considered a record.[4] Their income, though, was at a loss of $9.7 million,[4] and this situation continued through the late 1980s. Even though sales were increasing, Brookstone decided to focus on ideas of creating products towards women, and converting their stores' overall look driven towards a "men's clubhouse" feeling. Store arrangements were also changed to provide a less crowded, and more comfortable atmosphere. These efforts proved to be successful as an annual positive income was made at $4.9 million, with sales at $104.6 million in the early '90s.[4]

Even with this success, Brookstone wanted more improvements, and decided to cut back its computer programming staff that worked on their retail computer system. With needs in the retail scene changing, their initial, already developed retail software systems became useful, which ended up making Brookstone's remaining staffed programmers unnecessary, which developed into strong annual savings for Brookstone.[4]

In 1992, Brookstone ventured upon new types of sales avenues with the use of kiosks that featured the ability to purchase Brookstone items right at the kiosk, but contained a limited selection of items.[4] The kiosks were separated from the Brookstone stores, but were contained in the same mall. These kiosks also proved to be a successful business venture with an overall sales jump to $143.7 million.[4]

By 1993, Brookstone operated around 100 stores in the US. Sales in these stores accounted for 85 percent of their annual revenue, with their still existing magazine, and kiosk sales contributing to the remaining 15 percent.[4]

At this time, Brookstone only had two distribution centers, and decided to add a brand-new one in 1994 in Missouri, which resulted in faster shipments of their products to customers at no cost – as they ventured into the late 1990s with a count of around 150 stores in 32 states, more than 100 kiosks, and with the introduction of their online retail store.[4][8] Brookstone evolved into a multi-million dollar company while retaining a strong grip on their original theme of offering unique and interesting products. Over the course of the 1990s, Brookstone moved away from selling tools and similar items, and began to focus more on electronics. In the mid 2000s, Brookstone stores were redesigned with tile floors and track lighting. Future growth for Brookstone remains strong with a current retail store count of over 300 retail stores and 100 seasonal stores[9] in the US and Puerto Rico.[3][4][8]

In January 2014, Brookstone missed an interest payment to bondholders on their debt of $125 million from the original Osim/Childs/Temasek buyout.[10] As a result, Brookstone began to consult with firms including Hilco Global and Tiger Capital Group LLC on buying or investing in the company. On March 26, 2014, it was reported that the mall retailer Spencer Spirit Holdings, the parent of Spencer Gifts, would look to acquire Brookstone out of Bankruptcy for $120 million.[11] On April 3, 2014, Brookstone filed for bankruptcy as expected.[6]

In June 2014, Brookstone was purchased by the Chinese investment firm Sailing Capital and Chinese conglomerate Sanpower for more than $173 million. The Company successfully emerged from Bankruptcy in July 2014 with a restructured balance sheet, an improved capital structure, and a new strategic partner who is committed to growth of the Brookstone brand both in the U.S. and internationally.

Competition

Brookstone was in competition with The Sharper Image, which has since declared bankruptcy. Brookstone's major competitor, Hammacher Schlemmer, retails mostly online and through catalogs. It has one retail store in New York City.

Philanthropy

Since 2008, Brookstone has partnered with charity and nonprofit organizations, Charity for Women, Save the Children, pledging a small donation for every valid e-mail address customers provide in stores.

Controversy

Employment

In November 2009, Brookstone received media coverage over the firing of Massachusetts man Peter Vadala, who allegedly disagreed with a co-worker's homosexuality in a Boston store, after she made references to her same-sex fiancee seeking Vadala's congratulations. Brookstone asserts it has a zero-tolerance policy on discriminatory harassment.[12] Vadala asserted that Christians are "obviously" excluded from that discriminatory harassment policy in a Fox & Friends interview.

Frog-O-Sphere

The treatment of animals in Brookstone's Frog-O-Sphere, an aquarium-like self-cleaning tank which contains two African dwarf frogs,[13] has caused an animal rights controversy. In November 2009, PETA released an undercover video investigation allegedly depicting inhumane treatment of frogs prior to their use in Frog-O-Spheres at their supplier, Wild Creations. PETA alleges that frogs are raised in unfiltered water, infrequently fed,[13] and suffering from fungal infections.[14] Brookstone has denied these charges.[14]

References

  1. ^ "Brookstone Inc.". Business Week. Retrieved 2008-05-11. 
  2. ^ Brookstone Announces First Quarter 2011 Financial Results
  3. ^ a b c d e f g h Brookstone website – company info
  4. ^ a b c d e f g h i j k l m n Funding Universe company history on Brookstone, Inc.
  5. ^ Brookstone website – Brookstone Products
  6. ^ a b "Brookstone Enters into Stock Purchase Agreement with Spencer Spirit Holdings In Pre-Arranged Chapter 11". Retrieved 2014-04-04. 
  7. ^ a b c d Pierre de Beaumont, Brookstone Founder, Dies at 95
  8. ^ a b c d e Global Sources – Company profile on Brookstone
  9. ^ "Company Overview by Businessweek". Retrieved 2010-10-12. 
  10. ^ "Brookstone Considering Bankruptcy". Retrieved 2014-02-13. 
  11. ^ "Brookstone Preparing to File for Bankruptcy". Retrieved 2014-03-26. 
  12. ^ "Interview with Peter Vadala". AOL.com. November 10, 2009. Retrieved 2009-11-15. 
  13. ^ a b Brookstone online store - Frog-O-Sphere
  14. ^ a b The Boston Herald, December 10, 2009: PETA hops all over Brookstone

External links

  • Temasek Holdings
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